“So will I accept a tax increase as part of a deal to actually solve our problems? Yes,” said Sen. Tom Coburn (R-Oklahoma) on ABC News “This Week.” But Coburn insisted there must be a plan to control Medicare costs. He pinpointed the real problem: “We’re spending money that we don’t have on things that we don’t absolutely need and there’s no grown-ups in Washington that will say, time out, stop the politics, let’s have a compromise rather than continue to play the game through the press and hurt the country.”
Sen. Bob Corker (R-Tenn.) appearing on Fox News on Sunday said Republicans realize “we don’t have a lot of cards as it relates to the tax issue before year end.” He said there’s merit in the “theory” being put forth by “a lot of people” to concede to President Obama a hike in the tax rate of the top two percent of taxpayers. “I actually think it has merit where you go ahead and give the president … the rate increase on the top two percent,” Corker said. “The focus then shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation.”
This talk by some Republican senators about caving on a tax hike does not square with the plan put forth by the House Republican leadership. It proposes to increase tax collections — not rates — by $800 billion over the next 10 years but would not raise tax rates for any taxpayers. Other elements of the plan would reform the tax code, now loaded with special interest exemptions, to eliminate many loopholes and
The GOP plan would cut $600 billion from federal health care programs, partly by increasing the eligibility age for Medicare from 65 to 67 — a rational idea that is long overdue and yet Democrats are refusing to accept even that small step toward fixing a huge problem. Another key part of the plan is to reduce the inflationary growth in all federal programs including Social Security benefits –— another rational idea that is going nowhere with Democrats.
The Obama administration is so confident of the cards it is holding that it’s in no mood to back down. Treasury Secretary Timothy Geithner has made clear that the administration is quite willing to plunge off the fiscal cliff rather than agree to a deal that does not hike taxes on the highest income earners. There’s speculation that the administration might just as soon go off the cliff as not since it would result in huge tax hikes and whack defense spending.
This gives new meaning to the term “brinkmanship.”